Indian consumers are jeopardized due to money embezzlement
As if fake and counterfeit products were not enough, the
incidence of fake currency notes has resurfaced. And this time in a much bigger form. The flow of fake currency in market is not becoming a nightmare for officials and Indian intelligence but also for common man – as they are the ones who eventually end up at the receiving end. According to official estimates, around 1, 98,000 fake notes worth Rs. 2,000 crore are in circulation as of now in the country. This means that around three to four per cent of the currency circulating now in the economy is fake or counterfeit. Over 7.34 lakh fake notes of Rs.100 denomination were seized during 2006-2009, while fakes of Rs.500 and Rs.1,000 seized during this period were 5.76 lakh and 1.09 lakh respectively.
So if one gets petrified with such high probability of fake currency and decides to switch to plastic money for transactions, the risk does not seem to get eliminated. On an average 2,000 credit cards frauds are reported every month. ICICI Bank alone reported more than 8,000 cases of credit card fraud worth over Rs.11 crore. Besides, HSBC, another major credit card player in the country, reported close to 2,500 cases of fraud worth Rs.5 crore. And it is just the tip of the iceberg.
Even the scene with online banking transaction is similarly gloomy: Banks in the country have lost Rs.6.57 crore to Internet frauds (phishing) in 233 incidents of cyber crime. Lending institutions in Maharashtra, which reported the highest number of 23 incidents, have lost Rs.55.54 lakh to online fraudulent practices. Going by various surveys, Mumbai is ranked highest in India regarding phishing sites with 38 per cent and is followed by Delhi with 29 per cent. Bangalore and Chennai are with 12 per cent each. Internet fraud, today, is not just confined to banking sites but has spread its wings far and wide. Every thing from siphoning of money to looting donations (meant for earthquake and tsunami victims) is part of their job profile. In most of the cases these people pose as customer service representatives of banking institutions and use customers’ online details to obtain the credit card numbers. With the success rate being high, the prevalence of these incidents have seen a never before growth and have become more sophisticated too. In numerous cases, banks try and cover these events as they do not want to risk their brand image and customer loyalty. This image building exercise does more harm than good – both for banks and the customers.
Thus, it seems that when it comes to money, there is no escape – especially in India. Whatever mode of monetary transaction one adopts, the probability of losing money is always high. With perforated laws and lousy implementations, the culprit gets away scot free. The recent rules implemented by RBI on Internet transactions can solve this purpose to a little extent only. With people adopting Internet banking/plastic money, awareness and knowledge is still the most efficient protection against the Internet fraud. Otherwise, live always India will continue to enjoy only a false sense of security and paper based achievements.
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
As if fake and counterfeit products were not enough, the
incidence of fake currency notes has resurfaced. And this time in a much bigger form. The flow of fake currency in market is not becoming a nightmare for officials and Indian intelligence but also for common man – as they are the ones who eventually end up at the receiving end. According to official estimates, around 1, 98,000 fake notes worth Rs. 2,000 crore are in circulation as of now in the country. This means that around three to four per cent of the currency circulating now in the economy is fake or counterfeit. Over 7.34 lakh fake notes of Rs.100 denomination were seized during 2006-2009, while fakes of Rs.500 and Rs.1,000 seized during this period were 5.76 lakh and 1.09 lakh respectively.So if one gets petrified with such high probability of fake currency and decides to switch to plastic money for transactions, the risk does not seem to get eliminated. On an average 2,000 credit cards frauds are reported every month. ICICI Bank alone reported more than 8,000 cases of credit card fraud worth over Rs.11 crore. Besides, HSBC, another major credit card player in the country, reported close to 2,500 cases of fraud worth Rs.5 crore. And it is just the tip of the iceberg.
Even the scene with online banking transaction is similarly gloomy: Banks in the country have lost Rs.6.57 crore to Internet frauds (phishing) in 233 incidents of cyber crime. Lending institutions in Maharashtra, which reported the highest number of 23 incidents, have lost Rs.55.54 lakh to online fraudulent practices. Going by various surveys, Mumbai is ranked highest in India regarding phishing sites with 38 per cent and is followed by Delhi with 29 per cent. Bangalore and Chennai are with 12 per cent each. Internet fraud, today, is not just confined to banking sites but has spread its wings far and wide. Every thing from siphoning of money to looting donations (meant for earthquake and tsunami victims) is part of their job profile. In most of the cases these people pose as customer service representatives of banking institutions and use customers’ online details to obtain the credit card numbers. With the success rate being high, the prevalence of these incidents have seen a never before growth and have become more sophisticated too. In numerous cases, banks try and cover these events as they do not want to risk their brand image and customer loyalty. This image building exercise does more harm than good – both for banks and the customers.
Thus, it seems that when it comes to money, there is no escape – especially in India. Whatever mode of monetary transaction one adopts, the probability of losing money is always high. With perforated laws and lousy implementations, the culprit gets away scot free. The recent rules implemented by RBI on Internet transactions can solve this purpose to a little extent only. With people adopting Internet banking/plastic money, awareness and knowledge is still the most efficient protection against the Internet fraud. Otherwise, live always India will continue to enjoy only a false sense of security and paper based achievements.
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
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